Utah Legislative panel votes to recommend tax overhaul plan
SALT LAKE CITY (AP) — A legislative task force in Utah voted to recommend a tax reform plan to the Legislature that would reduce state taxes by $160 million, double the amount in a previous proposal, officials said.
The Tax Restructuring and Equalization Task Force met Monday ahead of a possible special session this week where lawmakers could address a sweeping change to the state tax code, task force members said.
The latest version of the plan would decrease state income taxes by $635.5 million while elimination of certain exemptions, new taxes and tax hikes would generate $475.5 million in new revenue, officials said. The proposal includes a food tax hike from 1.75% to the full 4.85% state sales tax rate generating $250 million by itself, officials said.
For a family of four, the average annual cut would total $300 if their income was $25,000; $525 if they earned $60,000; and $120 if they made $85,000, fiscal analysts said. About 78% of tax filers would experience a reduction, everyone else would pay more, analysts said.
Legislative leaders warned earlier this year that slow sales tax growth was creating an imbalance in the state budget compared to the income tax.
Some lawmakers oppose elements of the plan saying it represents a hardship for lower-income residents.
The proposal would leave more money in the pockets of state residents, representatives from the Utah Taxpayers Association, Utah Association of Realtors and Utah Apartment Association said. They encouraged the plan to proceed into a special session.
The new proposal is at least the fourth version since October and stems from a series of public meetings held around the state, officials said. A special session could be called as soon as Thursday to consider the plan ahead of the regular 2020 legislative session set to start at the end of January, officials said.
“We do have a budget problem,” Utah State Tax Commission chairman John Valentine told the Deseret News.
The state can’t tackle the complicated issue of tax reform while also prioritizing its budget in a general session, Valentine said. “You can’t do it unless you solve the underlying budgetary problems,” he said.